Asian stocks follow Wall St down after Fed inflation report

Beijing, Aug. 18 (BNA) Asian stock markets followed Wall Street lower on Thursday after the Federal Reserve said US inflation was too high, signaling support for further sharp interest rate increases.

Shanghai, Tokyo, Hong Kong and Sydney prices fell. Oil prices rose.

Wall Street’s benchmark S&P 500 index lost 0.7% on Wednesday, ending a three-day streak of gains, after notes from the Federal Reserve’s July 26-27 meeting showed members believe inflation remains “unacceptably high” despite One of the signs of weak US economic growth. She said the board saw “little evidence” that inflation pressures were easing.

Investors are concerned that the Federal Reserve and central banks in Europe and Asia will raise interest rates to tame multi-decade inflation that could derail global economic growth, according to the Associated Press (AP).

The Fed’s remarks raised “the potential for further tightening” even if the pace of increases slowed, while other investors see the potential for “excessive tightening that drags down growth,” Mizuho Bank’s Venkateswaran Lavanya said in a report.

The Shanghai Composite lost 0.5% to 3,276.62 and the Nikkei 225 in Tokyo fell 0.9% to 28,967.91. Hong Kong’s Hang Seng fell 0.5% to 19821.28.

Seoul’s Kospi fell 0.4% to 2507.31 and Sydney’s S&P-ASX 200 fell 0.3% to 7109.20.

New Zealand and Bangkok fell while Singapore and Jakarta advanced.

On Wall Street, the S&P 500 fell to 4,274.04. The loss wiped out the week’s gains and left the index down 0.1% since Monday.

The Dow Jones Industrial Average fell 0.5% to 33980.32 and the Nasdaq fell 1.3%. to 12,938.12.

The Commerce Department reported that retail sales for July were flat compared to the previous month, defying expectations for a slight increase. Retailers warned that high inflation will discourage consumers from spending on non-essential goods.

The retail chain’s target is down 2.7% after reporting a nearly 90% drop in second-quarter earnings. Children’s clothing and accessories chain Children’s Place fell 11% after reporting a sudden loss due to supply problems and inflation pressure.

Technology and telecoms stocks also fell.

The Fed’s notes on Wednesday indicated that the board plans to continue raising interest rates but gave no indication of when or to what extent.

The US central bank has raised its benchmark lending rate twice this year by 0.75 percentage points, three times its usual margin. Forecasters say another increase of the same size is possible at the Federal Reserve’s meeting in September, although the likelihood has declined as data shows weakness in the economy.

In energy markets, benchmark US crude rose 8 cents to $88.19 a barrel in electronic trading on the New York Mercantile Exchange. It jumped $1.58 to $88.11 on Wednesday. Brent crude, the price basis for international trading, rose 11 cents to $93.76 a barrel in London. It rose $1.31 in the previous session to $93.65.

The dollar rose to 135.06 yen from 135.05 yen on Wednesday. The euro rose to $1.0183 from $1.0169.

HF